Crude futures hit 2007 highs on Iran tension, gasoline strength

London (Platts)--26Mar2007

Global crude futures traded at three month highs Monday as tensions in
Iran over the country's nuclear program mounted, as well as NYMEX RBOB
front-month futures holding steady above the important $2/gallon level,
brokers said.
At 1143 London time (1043 GMT), the May ICE Brent futures contract
changed hands at $63.74/barrel, up 56 cents from Friday's settlement. Both WTI
futures contracts on ICE and NYMEX traded 47 cts higher at $62.75/b.
"Things are up due to the...situation in Iran as well as a
break through and continuation of trading above $2/gallon for NYMEX RBOB
futures," a broker said.
On Sunday, Iran decided to limit its cooperation with the International
Atomic Energy Agency, a day after the United Nations Security Council voted
for new sanctions over Iran's nuclear program.
After a meeting of the Council of Ministers on Sunday government
spokesman Gholamhossein Elham said that "the cabinet meeting decided the Iran
Atomic Energy Organization should halt part of its cooperation with IAEA until
Iran's case returns to IAEA from the Security Council and the situation gets
back to normal."
During the cabinet meeting, President Mahmoud Ahmadinejad took the
opportunity to declare Iran would continue its nuclear program despite a
unanimous vote by the UN Security Council to increase sanctions on Iran
because of concerns the country is using its nuclear energy program to develop
nuclear weapons.
With regard to the sanctions imposed on his country, Ahmadinejad called
the resolution illegal, adding such acts would only bring international bodies
into disrepute and undermines the Security Council's validity.
On Friday, April NYMEX RBOB futures broke through the psychologically
important $2/gal mark, however settled at $1.9983/gal. In early electronic
trading on Monday, the contract broke up through $2 once again and has
maintained trading above that level.
"RBOB was forced up there a little bit. When crude rallied last week RBOB
didn't move as much as heating oil so on Friday it (RBOB) basically caught
up," a broker said.
NYMEX RBOB futures for April were changing hands at $2.0130/gal up 1.47
cts. The April NYMEX heating oil contract traded at $1.7290/gal, up 1.79 cts
whilst the ICE gasoil futures contract was pegged at $545.75/mt, up $2.00/mt
from Friday.
--Jean-Luc Amos, jean-luc_amos@platts.com